This article is about the former record company. For the defunct film production company bearing this title whose assets now belong to Universal Pictures, see PolyGram Filmed Entertainment. For Universal Music Group's current production company, see PolyGram Entertainment. For the geometrical figure, see Polygram (geometry).
Later on, PolyGram expanded into the largest global entertainment company, creating film and television divisions. In May 1998, it was sold to the alcoholic distillerSeagram which owned film, television and music company Universal Studios. PolyGram was thereby folded into Universal Music Group, and PolyGram Filmed Entertainment was folded into Universal Pictures, which had been both Seagram successors of MCA Inc. When the newly formed entertainment division of Seagram faced financial difficulties, it was sold to Vivendi, and MCA became known as Universal Studios, as Seagram ceased to exist. Vivendi remains the majority owner of the Universal Music Group (while the film and television division was sold to NBCUniversal) until 2021. In February 2017, UMG revived the company under the name of PolyGram Entertainment, which currently serves as their film and television division.
History
Hollandsche Decca Distributie (HDD), 1929–1950
In 1929, Decca Records (London) licensed record shop owner H.W. Van Zoelen as a distributor in the Netherlands. By 1931, his company Hollandsche Decca Distributie (HDD) had become exclusive Decca distributor for all of the Netherlands and its colonies.[1] Over the course of the 1930s, HDD put together its own facilities for A&R, recording, and manufacturing.
HDD was commercially successful during World War II because of the absence of American and British competition. Van Zoelen wanted to sell to Philips so that HDD would have sufficient financial backing when their major competitors returned after the war. This led Philips to purchase HDD in 1942.[1]
In the mid 20th century, the majority of large recording companies manufactured both gramophones and records; Philips CEO Anton Philips noted the risk in creating gramophones without an interest in music recording and record manufacture, and that Radio Corporation of America (RCA) had merged with the Victor Talking Machine Company in 1929[2] for this reason. Philips' labs were developing magnetic tape and LPs, and they could support eventual new formats, although other record companies were notably unenthusiastic about experimenting with new formats.
After the war, Philips built a large factory in Doetinchem to produce 78 rpm records. Recording took place in Hilversum, whereas development took place in Eindhoven.[citation needed]
Philips Phonografische Industrie (PPI), 1950–1962
In the 1940s, the record business was spread out within Philips: research in the Eindhoven labs, development elsewhere in Eindhoven, recording in Hilversum, manufacturing in Doetinchem, distribution from Amsterdam, and exports from Eindhoven. During the late 1940s, Philips combined its various music businesses into Philips Phonografische Industrie (PPI), a wholly owned subsidiary.
PPI's early growth was based on alliances. A merger was first proposed with Decca of London in late 1945, but was rejected by Edward Lewis, Decca's owner. (PolyGram finally acquired Decca in 1980.)
In the early 1950s, Philips set itself the goal of making PPI the largest record company in Europe.
PPI's second attempt at a merger was with Deutsche Grammophon Gesellschaft (DGG). DGG, owned by Siemens AG, and well known for its classical repertoire, had been the German licensee for Decca from 1935. DGG also owned Polydor Records. Shortly after PPI was founded it had made a formal alliance with DGG to manufacture each other's records, coordinate releases, and refrain from poaching each other's artists or bidding against each other for new talent. PPI and DGG finally merged in 1962.
The alliance with DGG still left PPI without repertoire in Britain or the United States. But in 1951, after Columbia had failed to renew its international distribution agreement with EMI, PPI agreed to distribute Columbia recordings outside the United States. Columbia became PPI's distributor within the US. This agreement ran until 1961 when Columbia set up its own European network. PPI signed a worldwide distribution deal with Mercury Records in 1961. PPI's parent company Philips, through its U.S. affiliate Consolidated Electronics Industries Corp (a.k.a. Conelco), acquired Mercury in 1962.
PPI built or bought factories in smaller countries. In 1962, PPI had a large factory in Baarn and factories in France, Britain, Denmark, Norway, Spain, Italy, Egypt, Nigeria, and Brazil.
PPI played an important role in the introduction of the long-playing vinyl record to Europe. Columbia introduced their LP record in 1948, and Philips presented its first LP at a record retailers' convention in 1949. Philips' commitment to LP technology was an important factor in its 1951–1961 deal with Columbia.[3]
GPG and PolyGram, 1962–1980
In 1962, PPI and DGG formed the Grammophon-Philips Group (GPG) as a joint-venture holding company, with Philips taking a 50% share in DGG and Siemens a 50% share in PPI. In 1971, the UK record labels of Philips, Fontana, Mercury, and Vertigo were amalgamated into a new company called Phonogram, Ltd. In 1972, Grammophon-Philips Group reorganized all its operations and was renamed The PolyGram Group (in some countries, like Argentina, its name was Phonogram), of which Philips and Siemens each owned 50%. In 1977, both organizations merged operationally, integrating the recording, manufacturing, distribution and marketing into a single organization.
The various record labels within PolyGram continued to operate separately. PolyGram gave its labels, as A&R organizations, great autonomy.
After the merger, PolyGram began to move into the US and UK markets, and did so by a process of both formation and acquisition: Polydor Records established its American operations, Polydor Incorporated in 1969, Mercury Record Productions (US) was acquired in 1972 from sister company North American Philips Corp., and became Phonogram, Inc. MGM Records and Verve (US) were acquired in 1972. Subsequent PolyGram acquisitions included those of RSO (UK) in 1975, a 50% stake in Casablanca (US) in 1977 (with the remaining 50% in 1980), Pickwick in 1978, and Decca (UK) in 1980 (the latter acquisition basically brought PolyGram full circle, see the HDD section above). PolyGram acquired United Distribution Corporation (UDC) in 1973, and changed its name to Phonodisc, Inc., and signed international distribution deals with MCA and 20th Century Records in 1976.
In the late 1950s and early 1960s, Philips had been at work on a new consumer magnetic tape format for music. The Philips Compact Cassette was introduced in 1963. It was small and could play longer than an LP. In 1965 the cassette accounted for 3% of revenues, growing in 1968 to 8% and in 1970 to 10.6%.
In the late 1960s, and through the 1970s, GPG/PolyGram diversified into film and television production and home video. RSO's successes included Saturday Night Fever and Grease. PolyGram's highly successful marketing during the disco craze included the Casablanca FilmWorks production Thank God It's Friday (1978) and its associated soundtrack. During the boom in disco, PolyGram's US market share had grown from 5% to 20%. This can also be attributed to multi-million selling albums and 45s by the Bee Gees, Donna Summer, the Village People, Andy Gibb, Kool & the Gang, and rock band Kiss. For a short while in the late 1970s, it was the world's largest record company.[4]
In 1969, PolyGram established a direct mail-order business in the UK, Britannia Music Club, which ran till 2007.[5]
Reorganization, 1980–1999
Before 1978, PolyGram was losing money. When US operations were running at full capacity, PolyGram expanded aggressively, and would press large quantities of records without knowing the demand. In late 1979, PolyGram was caught off guard by the sudden end of the popularity of disco music, leaving it with an underutilized distribution network, profligate labels, and over optimistic product orders. PolyGram's Casablanca label was known for management spending on lavish industry parties and luxury cars. After 1980, PolyGram's losses had spiraled upwards of US$220 million.
Another contributing factor to PolyGram's financial woes was the massive failure of the big budget musical Sgt. Pepper's Lonely Heart's Club Band (1978). The film starred the Bee Gees and Peter Frampton at the height of their popularity, and featured the Beatles covers by them as well as Aerosmith, Billy Preston, and Earth, Wind & Fire. The film was highly anticipated to surpass the box office success of both the Saturday Night Fever and Grease, mostly due to its popular music stars. The soundtrack LP, based on only advance orders, was released triple platinum.[citation needed] The movie was released to poor reviews and died at the box office. Despite its triple platinum start, the soundtrack LP's sales bombed after the film's release. In turn, record dealers flooded PolyGram with returned LPs. The resulting losses nearly wiped out the profits the company had made on both the Saturday Night Fever and Grease soundtracks. The company took further loses when the disco craze ended in 1979 and record sales for both the Bee Gees and Casablanca's Village People plummeted. PolyGram also experienced losses with the defection of Casablanca's Donna Summer to newly formed Geffen Records as well as the dropping of Andy Gibb, whose personal problems with cocaine and alcohol began to affect his recording career, from RSO. Summer and the Bee Gees also had legal disputes with their labels which further complicated matters. Summer ended her contract with PolyGram in 1980, and was awarded the rights to her songwriting catalog by the courts; she owed them one more album, and finished out her contract by recording her album She Works Hard For The Money (from which the title track was a huge hit in 1983).
In 1980, after PolyGram bought the other 50% of Casablanca Records and Filmworks, PolyGram renamed its existing Casablanca Records & Filmworks unit as PolyGram Pictures with Peter Guber becoming chairman of the company.[6] During the late 1980s and early 1990s, PolyGram continued to invest in a diversified film unit with the purchases of individual production companies.
In 1981, Philips executive Jan Timmer became a member of the Group Management of PolyGram and was appointed president and chief executive officer of newly formed parent company, PolyGram International Ltd. in 1983. He cut the workforce from 13,000 to 7,000, reduced PolyGram's LP and cassette plants from eighteen to five, and decreased the company's dependence on superstars by spreading the repertoire across different genres and nurturing national and regional talent. Also by 1983, PolyGram's U.S. roster of labels included:
Polydor
Mercury
London
London/FFRR
Casablanca (until 1986, later to be reincarnated in 1994)
RSO
De-Lite
Riva
Threshold (owned by the Moody Blues)
Total Experience (founded by Lonnie Simmons, from 1981 to 1984)
Atlanta Artists (founded by Cameo lead singer Larry Blackmon)
...which were all consolidated into PolyGram Records, Inc. (now UMG Recordings, Inc.) In 1981, PolyGram launched domestic television syndication unit PolyGram Television (unrelated to the latter day incarnation that became Universal Worldwide Television in 1997), but it was soon folded after two years.[7]
Under its newly reorganized form, PolyGram decided to discontinue Philips as a pop and rock label in the UK and much of Europe, though it was still frequently issued records in France and South East Asia, where it issued many albums and singles by Chinese and Hong Kong pop artists. The majority of PolyGram's rock and pop music signings went to Mercury and Polydor. Philips became part of PolyGram Classics as a classical music label along with Decca Records and Deutsche Grammophon. By 1985, PolyGram had returned to profitability.
Wing Records was reincarnated in 1987 and became a very popular label over the following years, spawning the careers of Tony! Toni! Toné! and former Miss America, Vanessa Williams; the label was discontinued in the mid-1990s. Fontana was revived in the U.S. in 1989, but only for a short while. Today, Fontana Distribution is an independent label distribution unit of Universal Music Group. Vertigo Records still remained a rare U.S. PolyGram label, as most of its music was from Europe.
In April 1982, PolyGram assumed operational and managerial control of 20th Century Fox Records from its similarly named parent, which had just recently been bought out by oil magnate Marvin Davis, who was not interested in keeping the record company.[8] The assets of the former 20th Century Fox Records were fully acquired by the firm in July 1982,[9] and subsequently were consolidated with the Casablanca label.
After an attempted 1983 merger with Warner Elektra Atlantic failed, Philips bought 40% of PolyGram from Siemens, acquiring the remaining 10% in 1987.
In 1985, former CBS and Columbia executive Dick Asher was named president and CEO of PolyGram.[10] Asher was formerly the attorney for Don Kirshner's Aldon Music music publishing company.
The CD, invented by Philips and Sony, helped greatly in boosting the company's sales and market share. PolyGram's strength in classical music helped greatly, as many of the CD's early adopters were classical music lovers. Total US sales of CDs were $1 million in 1983, $334 million in 1990 and $943 million in 2000. Total UK sales were $300,000 in 1983, $51 million in 1990 and $202 million in 2000. The CD increased PolyGram's profit margin from 4-6% in the mid-1980s to 7-9% by the early 1990s. As well, videos were distributed by PolyGram Video.
In 1988, Philips acquired the remaining 50% of PolyGram from long-time partner Siemens and later in 1989, floated 16% of PolyGram on the Amsterdam stock exchange, valuing the whole company at $5.6 billion. PolyGram embarked on a new program of acquisitions, including A&M[11] and Island Records[12] in 1989, Swedish company Polar Music which held the rights to the ABBA catalogue, Motown and Def Jam in 1994 and Rodven (Venezuela) in 1995.
In 1990, after acquiring both Island and A&M, Alain Levy, (then) executive vice-president of PolyGram N.V., re-organized the U.S. operations of PolyGram Records, Inc. into a new expanded conglomerate: PolyGram Group Distribution, Inc. In addition to overseeing the sales, marketing, manufacturing and distribution of music and video products created by PolyGram, PGD was also responsible for supervising a number of other divisions within PolyGram (U.S.) such as: PolyGram Music Group, PolyGram Video, PolyMedia, PolyGram Special Markets, PolyGram Merchandising, Independent Label Sales (ILS) and New Media & Business Development.
PolyGram and Granada TV formed a joint venture, Big Picture Productions, in 1990 as a music programing firm which, at Cannes in 1990, purchased exclusive international distribution rights to Brown Sugar (The two-hour special featured black female performers and was hosted by Billy Dee Williams) from the New York–based Gene David Group.[13]
In June 1991, Alain Levy was promoted to worldwide president and CEO of PolyGram N.V.
In 1996, Cor Boonstra became CEO of Philips; by the time he took over, Philips was seen as a bloated company, laden with too many layers of management and unrelated companies that they could not leverage effectively. As a result, Boonstra began to sell or dispose of various non-core assets.[16] While Philips began to withdraw from other media activities, Boonstra denied that PolyGram was for sale.[17] However, by early 1998, he had changed his attitude, instead deciding to pursue a manufacturing-only business plan.[18] (In hindsight, analysts have pointed out how Philips ultimately benefitted from the manufacture and sale of blank CDs, which played a significant part in the music piracy that began to affect the industry in the early 2000s.)[19]
After weeks of speculation, on May 22, 1998, Philips announced that they would sell PolyGram to Seagram for $10 billion.[20] Some of the reasons cited for the deal were a lack of pop hits from the music side of the company, and an equal lack of box-office successes from the film side.[21] Alain Levy resigned as CEO of PolyGram on June 23 to prepare for the merger,[22] and the deal was closed on December 10, 1998, with PolyGram's operations folding into Universal Pictures and Universal Music Group.[23]
Seagram however, was only interested in PolyGram's music division, and in October 1998 they announced that they would begin divesting PolyGram's entertainment assets, while the remainder would be folded into Universal.[24] Prior to this announcement, the company announced the sale of their 75% stake in children's distributor Abbey Home Entertainment back to its original founders and the acquisition of Astrion plc.[25] On October 23, Metro-Goldwyn-Mayer agreed to purchase PolyGram Filmed Entertainment's pre-April 1996 library for $250 million, which included over 1,300 films from various assets PolyGram had acquired within that point, but did not include the ITC Entertainment library, which was sold on January 19, 1999 to Carlton Communications for £91 million.[26][27] On April 8, 1999, USA Networks announced they would purchase PolyGram Filmed Entertainment's domestic division (including PolyGram Video's US & Canada operation), among other assets.[28] After the sale, the divisions were renamed USA Films and USA Home Entertainment respectively. The assets of Slash Records and London Records were sold to Warner Music Group. What remained of PolyGram was folded into both Universal Music Group and Universal Pictures.[29]
On February 10, 1999, Universal announced that they would pull out of their CIC Video and United International Pictures ventures with Paramount Pictures and rebrand PolyGram Filmed Entertainment's international division (including PolyGram Video's international operation) under the Universal name.[30] Whilst the home video division rebranding was successful (with CIC rebranding under the Paramount umbrella toward the end of 1999[31][32]), the theatrical division rebranding would prove to be a failure, as films from the rebranded Universal Pictures International flopped at the box office, the company therefore announced in October 1999 that their operations would be downgraded to the home video market only and renewed their UIP deal with Paramount for five years, the remains of PolyGram's theatrical assets would then be folded into United International Pictures. Mickey Blue Eyes would become the last film distributed under the ex-PolyGram unit.[33]
The PolyGram name now survives via reissue of music under the Polydor Records label as well as a publishing arm of Universal Music Publishing Group. The Japanese branches of the PolyGram labels that were absorbed to form Universal Music Japan and were rebranded: Polydor remained until 2002, when it merged with the Universal label to form Universal J, Kitty Records and Mercury remained until 2000, when they merged and became the short-lived Kitty MME, which later in 2002, moved some artists to Universal J, and in 2004, Kitty MME became Universal Sigma.
Geffen Records is an American record label, founded in late 1980 by David Geffen. Originally a music subsidiary of the company known as Geffen Pictures, it is owned by the Interscope Geffen A&M (IGA) faction of Universal Music Group (UMG).
Decca Records is a British record label established in 1929 by Edward Lewis. Its US label was established in late 1934 by Lewis, Jack Kapp and Milton Rackmil, who later became American Decca's president too. In 1937, anticipating Nazi aggression leading to World War II, Lewis sold American Decca, and the link between the UK and US Decca label was broken for several decades. The British label was renowned for its development of recording methods, while the American company developed the concept of cast albums in the musical genre.
MCA Records was an American record label owned by MCA Inc. established in 1972, though MCA had released recordings under that name in the UK from the 1960s. The label achieved success in the 1970s through the 1980s, often by acquiring other record labels, from ABC to Motown to Geffen. MCA Inc. became Universal Studios, Inc., in 1996, and the MCA record label was folded into Universal Music Group's Geffen Records in 2003, but Universal's MCA Nashville continues to use the moniker.
Polydor Limited, also known as Polydor Records, is a German-British record label that operates as part of Universal Music Group. It has a close relationship with Universal's Interscope Geffen A&M Records label, which distributes Polydor's releases in the United States. In turn, Polydor distributes Interscope releases in the United Kingdom. Polydor Records Ltd. was established in London in 1954 as a British subsidiary of German company Deutsche Grammophon/Schallplatte Grammophon GmbH. It was renamed Polydor Ltd. in 1972. The company is usually mentioned as "Polydor Ltd. (UK)", or a similar form, for holding copyrights.
Deutsche Grammophon is a German classical music record label that was the precursor of the corporation PolyGram. Headquartered in Berlin Friedrichshain, it is now part of Universal Music Group (UMG) since its merger with the UMG family of labels in 1999. Deutsche Grammophon is the world's oldest surviving established record company. Presidents of the company are Frank Briegmann, Chairman and CEO Central Europe of Universal Music Group and Clemens Trautmann.
Mercury Records is an American record label owned by Universal Music Group. It had significant success as an independent operation in the 1940s and 1950s. Smash Records and Fontana Records were sub labels of Mercury. Mercury Records released rock, funk, R&B, doo wop, soul music, blues, pop, rock and roll, and jazz records. In the United States, it is operated through Republic Records; in the United Kingdom and Japan, it is distributed by EMI Records.
London Recordings is a British record label that marketed records in the United States, Canada, and Latin America for Decca Records from 1947 to 1980 before becoming semi-independent. The London name – as London American Recordings, often shortened to London American – was also used by British Decca in the UK market, for releases taken from American labels, which British Decca licensed.
Verve Records is an active American record label owned by Universal Music Group (UMG). Founded in 1956 by Norman Granz, the label is home to the world's largest jazz catalogue, which includes recordings by artists such as Ella Fitzgerald, Cal Tjader, Nina Simone, Stan Getz, Bill Evans, Billie Holiday, Oscar Peterson, Jon Batiste, and Diana Krall among others as well as a diverse mix of other recordings that fall outside of jazz including albums from disparate artists like the Velvet Underground, Kurt Vile, Arooj Aftab, Frank Zappa and the Mothers of Invention and many more. It absorbed the catalogues of Granz's earlier label, Clef Records, founded in 1946; Norgran Records, founded in 1953; and material which was previously licensed to Mercury Records.
PolyGram Filmed Entertainment was a film production company founded in 1975 as an American film studio, which became a European competitor to Hollywood within two decades, but was eventually sold to Seagram in 1998 and was folded into Universal Pictures a year later. Among its most successful and well known films were The Deep (1977), Midnight Express (1978), An American Werewolf in London (1981), Flashdance (1983), Four Weddings and a Funeral (1994), Trainspotting (1996), Dead Man Walking (1995), The Big Lebowski (1998), Fargo (1996), The Usual Suspects (1995), The Game (1997), Candyman (1992) and Notting Hill (1999).
Universal Records was a record label owned by Universal Music Group and operated as part of the Universal Motown Republic Group. The label has been dormant since 2006, due to Universal Motown and Universal Republic Records being formed and taking all of the artists from it. Those labels were eventually combined to form the latest iteration of Republic Records.
Philips Records is a record label founded by Dutch electronics company Philips and Dutch-American music corporation Universal Music Group. It was founded as Philips Phonographische Industrie in 1950. In 1946, Philips acquired the company which pressed records for British Decca's Dutch outlet in Amsterdam.
Phonogram Incorporated was started in 1970 as a successor to Philips Phonographic Industries, a unit of the Grammophon-Philips Group (GPG), a joint venture of Philips N.V. of the Netherlands and Siemens A.G. of Germany.
Frederick Woodruff "Ted" Field is an American media mogul, record executive, entrepreneur and film producer.
Atlantic Entertainment Group was an independent film production and distribution company founded by Tom Coleman and Michael Rosenblatt in 1974.
Gramercy Pictures was an American film production label. It was founded on May 20, 1992 as a joint venture between PolyGram Filmed Entertainment and Universal Pictures. Gramercy was the distributor of PolyGram films in the United States and Canada and also served as Universal's art-house division. After Seagram's buyout of PolyGram, Gramercy along with October Films and Interscope Communications were merged by Barry Diller to form USA Films in 1999. On May 20, 2015, Focus Features revived the name as a label for action, horror and sci-fi genre films; the label was shut down after the release of Ratchet & Clank on April 29, 2016.
A&M Records is an American record label founded as an independent company by Herb Alpert and Jerry Moss in late 1962. Due to the success of the discography A&M released, the label garnered interest and was acquired by PolyGram in 1989 and began distributing releases from Polydor Ltd. from the UK.
A Polyphon is a disc-playing music box. The machine was invented in 1870; it was first manufactured by the Polyphon Musikwerke, in Leipzig, Germany, full-scale production having started about 1896 and continuing into the early 20th century. Polyphons were exported all over the world; music was supplied for the English, French, German markets, as well as further afield, with pieces cataloged for the Russian, Polish, and Balkan regions. Polyphon is also a record label as registered by German Polyphon Musikwerke AG in 1908. Polyphon traded under the Polydor label since 1913 with their trademarks Polyphon Musik and Polyphon Record.
Alain Levy is an entertainment industry executive. He was born in Metz, France, on 19 December 1946.
Universal Music Group México S.A. de C.V. is a Mexican subsidiary of the Universal Music Group founded in 1963. It was founded as Dusa Discos Universales in 1963, undergoing several name changes over the years, first being first acquired by Gramophon-Philips Group (PolyGram) in 1971. It has been known as Universal Music México since 1999, following PolyGram's merger with UMG through the acquisition of Seagram.
↑ Geisst, Charles R. (14 May 2014). "Radio Industry". Encyclopedia of American Business History. p.352. ISBN9781438109879. Retrieved 15 April 2016.
↑ Bakker, p.17. "Philips' commitment to the LP technology was an important factor for Columbia's willingness to enter the long-term alliance with PPI in 1950. "
↑ Bakker, p.26. "During the disco-boom, Polygram's US market share had jumped from five to twenty percent. For a few years, it was the world's largest record company."
↑ Billboard - 25 Dec 1999 - 1 janv. 2000 - Page 90 "In the year ending in June, both companies are said to have had combined sales of $460 million and an operating profit of $50 million. Sales of $480 million are forecast for the year to June 2000. Britannia, launched in 1969 by Poly Gram, has ..."
Bakker, Gerben. "The Making of a Music Multinational: The International Strategy of PolyGram, 1945-1988." Business History Review 80:1 (Spring 2006), pp.81–123. (preprint)
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